Debt Management

If due to changed financial circumstances you fund yourself unable to meet your mortgage repayments, you should follow these practical steps to manage the situation.

1. Contact your mortgage lender as soon as possible.

2. Draw up a household budget as your mortgage lender will want to see what you can afford to pay each month. If you need a template for budget contact Home Brokers for our free excel version. Free help is available from MABS (the Money Advice and Budgeting Service on 1890 283 438)

3. Do not ignore the letters or phone calls from your mortgage lender or their representative. If however you are receiving what you believe to be an inappropriate number of calls of an agressive nature seek professional help from MABS.

4. The following options are outlined in the Statutory Code of Conduct on Mortgage Arrears, so consider which might work for you and submit your proposal to your lender:

• putting off for a period of time all or part of your monthly mortgage repayment in order to ease the immediate pressure on you
• reducing your monthly mortgage repayment by extending the number of years for which your mortgage runs
• reducing your monthly  mortgage repayment by changing the type of mortgage you have
• takling any arrears by reducing the amount of your monthly mortgage repayment
• adding some of the arrears and interest onto the total amount borrowed so that they can be cleared at a later date - this is known as 'capitalising' the arrears and interest

Some important information you should remember:

Your lender must wait a minimum period of time from the time arrears first arise before starting legal proceedings in the courts to repossess your home. The minimum period of time is 12 months for all mortgage lenders under the Code of Conduct  on Mortgage Arrears. This only applies however where you are proactively engaging with your lender.

If after 12 months you are still having genuine difficulty in making your mortgage repayments, your lender will further assist you by trying to agree an arrangement with you. Provided you maintain that agreement your lender will not start legal action against you and will review the agreement with you on a regular bases after that. This commitment to you arises under the IBF (Irish Banking Federation) Pledge to Homeowners which was published in November 2009.

The mortgage lenders who subscribe to the Code of Conduct on Mortgage Arrears are: 

ACC Bank, AIB Bank, Bank of Ireland, Bank of Scotland (Irl) EBS Building Society, Irish Nationwide Building Society, KBC Bank Ireland, Leeds Building Society, National Irish Bank, Permanent tsb, Ulster Bank.

If you are worried that you might fall into arrears but are currently maintaining your repayments contact Home Brokers for a free consultation. The service includes a full financial review and household budget. The review takes approximately one hour and could identify immediate savings.  

You may find the new citizens information website established by the Minister for Social and Family Affairs useful -  take a look at www.keepingyourhome.ie.